How to Get a Business License & Tax ID

by Natalie Grace, Demand Media

Licensing and tax ID regulations depend on your business structure and location.

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A business license allows you to legally conduct business in your state, city or county. A tax identification number (or employer identification number) is used to identity your business for tax purposes. Whether you need a business license and a tax ID depends on the business you own and your geographical location. Check with the relevant government institutions to determine if you need a license and a tax ID. You can also apply for the license and the tax ID via these same agencies.

Step 1

Contact your secretary of state to apply for a state business license. Each state typically has a secretary of state website with information on how to apply for the license. For example, if you’re an architect in Georgia, you can apply for your business via the Georgia Secretary of State website.

Step 2

Call or visit your local city hall or county courthouse to apply for a city or county license. Even if the state doesn’t require that you have a state business license, most local governments require a county or city license. For example, you must obtain a group home license in the city of Boise if you will be providing child care for seven to 12 children.

Contact the appropriate federal agency to apply for a federal license. A few businesses, such as manufacturers of alcohol, tobacco and firearms, and broadcasting companies, are required to have a federal business license. For example, you would contact the Federal Communications Commission to apply for a broadcast station license.

Step 4

Apply for a federal tax ID via the Internal Revenue Service. The IRS displays the application instructions on its website. Ensure you actually need a federal tax ID before applying for one. You can apply online, or via phone, fax or mail.

Step 5

Apply for a state tax ID, if applicable. Check with your department of revenue or state labor board for application instructions. Be aware that you may not need a state tax ID. For example, the state of New Jersey allows partnerships and business owners with employees to use their federal tax IDs as their state tax IDs. Alternately, the state of California requires state tax ID.

Tips

Licensing can range from a simple operating license to specific permits. Depending on the space you own or lease, you may require a zoning compliance permit; you may need a special license for a home-based business, such as a hair salon; and you may need a permit to remodel your business space. Your state, city or county government can tell you which licenses you need.

Check with the respective agency for license renewal guidelines; most licenses are valid for one year.

About the Author

Natalie Grace has been writing professionally since 2009. Her academic writings have been featured in several prominent national publications, which are available to schools and libraries. Grace has more than 10 years of experience in payroll-and-benefits administration, human resources and accounting. She writes regularly on these and other business-related topics for websites and private clients.

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